CoreWeave Shares Fall Nearly 10% on Second Trading Day

Michael Intrator, the Founder and CEO of CoreWeave, Inc., attended the company's initial public offering (IPO) at the Nasdaq Market in New York City on March 28, 2025. CoreWeave is a cloud services provider supported by Nvidia.

On Monday, CoreWeave's stock price dropped almost 10%, falling below the price at which the company initially offered its shares to the public.

The AI cloud provider had set its share price at $40 for its IPO. In its first trading session, the stock opened at $39 and closed at $40. This public offering has been notable as it is the largest tech IPO since 2021 and marks the first instance of a pure-play AI company entering the public market. The IPO raised $1.5 billion, making it the largest U.S. IPO since automation software maker UiPath debuted at $1.57 billion in 2021.

CoreWeave’s public offering was seen as a critical test for the IPO market, which has faced challenges since early 2022. Inflation and rising interest rates have made investors cautious about taking risks.

Market Context

Prior to the CoreWeave offering, there had been hopes that a favorable economic climate would lead to a resurgence of IPOs, especially following significant political events. However, new tariffs have created economic uncertainty and affected the interest in technology stocks. The tech-heavy Nasdaq Composite index was down more than 10% for the year as of that time.

Initial Offer and Adjustments

CoreWeave had originally aimed for its share price to be somewhere between $47 and $55, which would have potentially raised around $2.5 billion. However, the company reduced its offering to 37.5 million shares from an initial 49 million. This decision was made to better align with demand.

Michael Intrator spoke on CNBC's "Squawk Box" on Friday, mentioning the challenges posed by the macroeconomic environment. "There are a lot of headwinds in the macro," he stated, emphasizing that the company had to adjust the scale of the transaction based on investor interest.

CoreWeave’s Business Model

CoreWeave specializes in renting access to a vast number of Nvidia graphics processing units (GPUs) to tech and AI giants like IBM, Meta, and Cohere. Notably, Microsoft is CoreWeave's largest client, contributing 62% of the company's revenue last year. CoreWeave faces competition from major players such as Amazon, Google, and Oracle.

The company was initially called Atlantic Crypto when it was founded in 2017, originally focusing on providing infrastructure for Ethereum mining. As digital asset prices decreased, CoreWeave pivoted to acquiring more GPUs and shifted its focus towards artificial intelligence.

In its prospectus filed earlier this month, CoreWeave reported that its revenues had surged by over 737% last year, reaching $1.92 billion. However, the company also disclosed a net loss of $863 million for the same period.

— Reporting by various sources.

Stocks, Tech, AI